The nation's chain retailers turned in a solid performance in January as consumers capped a year-long spending frenzy by seeking out winter clearance sales.
A survey of 71 chain stores showed an average sales increase of 5.4 percent, according to Bank of Tokyo-Mitsubishi. A measure based on sales volume of check-writing consumers at a cross section of retailers showed that sales rose 4.6 percent, said check-acceptance company TeleCheck Services Inc.
Despite winter storms late in the month in the Southeast and Northeast and a post Y2K slowdown in spending in some categories, sales remained brisk, as they have for the past year, said Michael P. Niemira, a vice president at the Bank of Tokyo-Mitsubishi.
"Consumers continued their shopping spree," he said.
Most companies hit their projected sales targets, though sales results tended to vary widely from chain to chain, analysts said.
"Sales were pretty good, pretty much as we thought," said Jeff Edelman, a retail analyst with PaineWebber in New York. "The important thing is stores cleared their inventory and are going into a new year clean."
Retailers are benefiting from the longest period of economic growth in U.S. history. Consumer spending is getting a boost from a strong stock market, low unemployment and rising household incomes, said William Ford, senior economic adviser for TeleCheck.
Retailers that posted the biggest jumps in sales, compared with January a year ago, included specialty apparel retailers Gap Inc., with an 11 percent gain, and the Limited Inc., with a 9 percent increase.
Gap's sales were led by men's and women's sweaters at Gap stores and by men's and kids active wear at Old Navy stores, officials said.
J. C. Penney Co. said sales at department stores were up a higher-than-expected 6.1 percent, driven by home furnishings, women's apparel and accessories.
Kohl's Corp. said comparable store sales jumped 8.5 percent in January, and 7.9 percent for the fiscal year. Yesterday, the chain's chief executive officer, Larry Montgomery, said the chain plans to open 39 stores in the first quarter -- 33 of those in former Caldor's, including a Severna Park site.
Discounters do well
Mass discounters as a group also posted strong, if not stunning, results, as they have for much of the year. Sales rose 4.1 percent at Wal-Mart Stores Inc., the world's largest retailer, and 3.6 percent at Kmart Corp.
Target Corp., formerly Dayton Hudson Corp., reported that same-store sales rose 5.7 percent, with January sales better than expected, said Bob Ulrich, chairman and chief executive officer. The company's sales increase was driven by its Target discount division, where sales rose by 6.4 percent.
"For the past year, the discount sector has been one of the strongest," said Sally H. Wallick, a retail analyst with Legg Mason Wood Walker. "That's a function of good execution on the part of the discounters, offering consumers good value and being consistent."
January is considered one of the least significant months for retailers, as many close out their fiscal year and mark down holiday and winter inventory to make room for spring apparel.
Some retailers managed to boost margins by selling goods at full price, in cases where pre-Christmas inventory had sold well in December, analysts said.
"Some would have had less [inventory] to mark down, which can have a negative effect on sales but can be good for margins," Wallick said.
But other chains, such as J. C. Penney, used highly promotional sales to lure shoppers and ended up hurting their gross margins.
Some warehouse clubs said the brisk spending on Y2K items in December ended up hurting them in January, as sales slowed down.
At Sam's Club, for instance, comparable sales fell 1.9 percent.
Weather harms, helps
Some retailers blamed winter storms in the southeast and northeast for slower sales, though analysts said the colder weather may have actually helped clear out winter apparel.
"Although winter storms contributed to slower sales in the south-central and southeastern regions of the country, business was strong in areas of the country not affected by weather," said Arthur C. Martinez, chief executive officer of Sears, Roebuck and Co., which posted a gain of 1.7 percent. "Home appliance and fitness equipment sales showed solid increases, which were offset by slower sales in other apparel categories."
At Saks Inc., where sales rose 3 percent, the categories hurt the most included women's moderate and better sportswear, day dresses, suits and women's special sizes. The best-performing categories included designer women's apparel, coats and outerwear, accessories, cosmetics, shoes, fine jewelry and home merchandise.
The Dress Barn Inc., which sells discounted women's career and casual fashions, saw its sales fall by 6 percent.
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